Minor International to Increase its Stake in NH Hotels

7/5/2018

Minor International (“MINT”) announces today that it has reached an agreement with HNA Group to purchase an equity stake of 25.2% (on a fully-diluted basis) in NH Hotel Group in a two-tranche transaction valued at EUR 619 million. The purchase follows MINT’s earlier purchase of a 9.5% shareholding (on a fully-diluted basis) in NH Hotel Group.

MINT also confirms that it will follow Spanish regulations as applicable to launch an all-cash public tender offer to acquire NH Hotel Group’s remaining shares. Such offer would be at a price not lower than MINT’s highest acquisition price in the last 12 month-period, currently EUR 6.40 per share (subject to fair price adjustments). MINT targets its shareholding in NH Hotel Group at around 51%-55% and intends to keep NH Hotel Group as a publicly-listed company on the Madrid Stock Exchange with strong corporate governance. Based on the target ownership level, the acquisition will be funded through debt instruments, while 2019E interest-bearing-debt to equity ratio is expected to be maintained at a comfortable level of 1.3x.

“Today we are embarking on a new era, driving investment strategy to further cement our footprint in the European hospitality industry”, said Dillip Rajakarier, CEO Minor Hotels. “We will be able to create a network of over 540 hotels with a reach across Asia, Oceania, the Middle East, Africa and Europe, all of which are important hospitality regions around the world.

The business network will allow the two companies to capitalize on our leadership positions in key growth areas, highly complementary asset and brand portfolio, technology platform and talented employees. MINT can also support the NH Hotel Group with its food & beverage expertise where appropriate to enhance customer experience and maximize revenue potentials. Together, we will be well-positioned to achieve greater success, provide greater value to customers and create more exciting growth opportunities than either company could achieve alone.”

The share purchase from HNA Group will be in two tranches. The first tranche of 65.85 million shares, representing 16.8% shareholding on a fully-diluted basis, will be completed on or around 15 June 2018. The second tranche, consisting of 32.94 million shares or 8.4% on a fully-diluted basis, is expected to be completed in September 2018.

In addition, MINT also announces its intention to follow Spanish regulations, as applicable, to launch an all-cash public tender offer to acquire NH Hotel Group’s remaining shares, under which the applicable price shall not be lower than MINT’s highest acquisition price in the last 12 month-period, currently being EUR 6.40 per share (subject to fair price adjustments).

The proposed tender offer is subject to the approvals of MINT’s shareholders, the National Securities Market Commission of Spain (CNMV) and clearance by relevant anti-trust authorities. The final acquisition percentage will be dependent on NH Hotel Group’s existing shareholders’ decision to sell their shares at MINT’s proposed tender offer price. The tender offer process is expected to take 3-5 months after the launch of the tender offer.